Chapter 3 Textbook Notes- Global Markets.docx

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Department
Accounting & Financial Management
Course
AFM 123
Professor
Corey Van De Waal
Semester
Winter

Description
AFM 131 Chapter 3 – Competing in Global Markets  Strategies for reaching global markets  • Exporting  o Least amount of commitment, control, risk and profit potential  • Licensing  o A global strategy in which a firm (the licensor) allows a foreign company  (the licensee) to produce its product in exchange for a fee (a royalty)  Example: Disney gives licenses to Tokyo to make theme parks in  Tokyo  • Franchising  o Is an agreement whereby someone with a good idea for a business sells the  rights to use the business name and sell a product or service to others in a  given territory.  Example: Boston Pizza  • Contract Manufacturing  o A foreign country’s production of private label goods to which domestic  company then attaches its brand name or trademark; also called  outsourcing   Example: Nike • International Joint ventures and strategic alliances  o Joint Venture ­ A partnership in which two or more companies (often from  different countries) join to undertake a major project or to form a new  company.  Benefits of a Joint Venture are  • Shared technology and risk • Shared marketing and management enterprise 
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